Figure 2.1 The Market for Calculators

-Refer to Figure 2.1. Initially, the market is in equilibrium at a price of $25 and quantity of 15 calculators. If consumer tastes and preferences worsen for calculators, which of the following would best represent the new equilibrium price and quantity?
A) price = $65, quantity = 16 calculators
B) price = $40, quantity = 21 calculators
C) price = $40, quantity = 6 calculators
D) price = $15, quantity = 11 calculators

Question

Figure 2.1 The Market for Calculators
 
-Refer to Figure 2.1. Initially, the market is in equilibrium at a price of $25 and quantity of 15 calculators. If consumer tastes and preferences worsen for calculators, which of the following would best represent the new equilibrium price and quantity?
A) price = $65, quantity = 16 calculators 
B) price = $40, quantity = 21 calculators 
C) price = $40, quantity = 6 calculators 
D) price = $15, quantity = 11 calculators

Quizplus · Accepted Answer

When consumer tastes and preferences worsen for a product, the demand for that product decreases. This leads to a shift to the left in the demand curve, resulting in a lower equilibrium price and quantity. Therefore, option D, with a lower price and quantity, best represents the new equilibrium.

Figure 2.1 the Market for Calculators